+ 06 BOB DUDLEY 12 GOM TIMELINE 28 OMAN BP CEO discusses Key dates in oil Major milestone safety and risk spill response for gas project

THE INTERNATIONAL MAGAZINE OF THE BP GROUP ISSUE 1 2011 BPMAGAZINE

40 SPOTLIGHT: CHINA PERFECTING THE BLEND BP Magazine reports from China, where a 30-year partnership is helping the country address its energy needs. Welcome. A year has passed since the tragic accident at the Deepwater Horizon oil rig in the contents / issue 1 2011 Gulf of Mexico, in which 11 men lost their lives. The subsequent oil spill lasted 87 days and + Features required an unprecedented response. As BP pauses 06 In his own words BP chief executive Bob Dudley discusses the challenges facing the company as it marks the first to mark this difficult event, its chief executive, anniversary of the Gulf of Mexico oil spill. By Lisa Davison Bob Dudley, talks to BP Magazine (page 6) about Photography by Harrison McClary, Graham Trott, Stuart Conway and Tim Campbell how the company continues to meet its GULF OF MEXICO obligations in the Gulf Coast region, the changes 12 Timeline On 20 April 2010, a fire and explosion on the Deepwater Horizon rig led to the deaths of 11 men and a major being made in BP and the challenges it still faces. oil spill. This timeline looks back at the key events in the We’ve also created a timeline of last year’s events response that followed. (page 12) and we examine one of the graphics that 18 The subsurface challenge Graphics and images were vital in telling the public what BP was doing to stop the leak. This helped explain the scale of the subsea challenge fish’s eye illustration shows the scale of the offshore response. (page 18). The events of 2010 have left BP with a 20 Map of the region A geographical view of the Gulf Coast series of commitments, not least to continue region and its affected communities. Illustration by Lance Bell putting safety and risk management at the heart 22 Interview Mark Bly is the head of BP’s safety and of its operations. We meet the team at the SECCO operational risk division and he talks about what’s changing petrochemicals plant in China who has achieved within the company. Photography by Rocky Kneten, Marc Morrison and Stuart Conway 88.6 million manhours without a fatality or major 28 Major milestone With gas now flowing through a BP process safety incident as a consequence (page test facility, Oman’s hopes of unlocking its significant tight gas 44). Turning to other parts of the BP business, we reserves take a step closer to reality. By Amanda Breen report on developments in Oman to bring tight Photography by Richard Davies and Mehmet Binay gas reserves online and we find out about one of Cover story 40 Collaborative approach How BP’s long history of BP’s new biofuels businesses (page 50). working with China is helping it support the country’s Lisa Davison> Editor commitments to safety, growth and energy security. By Jaclyn Clarabut Photography Simon Kreitem

50 Talent pool The acquisition of Verenium’s cellulosic biofuels business has substantially increased BP’s biotechnology capability, through cutting-edge technology and talented people. By Paula Kolmar Photography by Joshua Drake and Frank Hom

56 Ultimate winners The student team that won the inaugural Ultimate Field Trip competition talks about their six- week experience as BP interns. By Jaclyn Clarabut Photography by Graham Trott and Stuart Conway

+ Regulars

04 For the record A snapshot of BP news and statistics from BP MAGAZINE around the world. The international magazine of the BP Group – ISSUE 1 2011 27 BP Faces Randy Fletcher and Brad Byczynski talk about BP Magazine is published quarterly for external readers around the how they help BP emergency responders to think about world, as well as past and present BP employees. Its content does not necessarily reflect official company views. leadership in a different way. By Paula Kolmar Photography by Marc Morrison The copyright for photographs and illustrations in BP Magazine is not always owned by BP. Please contact BP Photographic Services for details. 38 Science made simple How horizontal drilling is managing editor design helping to extract more unconventional sources of hydrocarbons. David Vigar Phil Steed – Steed Design By Amanda Breen Illustration by Magic Torch david.vigar@bp.com [email protected] www.steeddesign.com editor 48 Viewpoint Senior executives attend a meeting with the Lisa Davison print management British chancellor to formalise the Reliance deal. [email protected] Williams Lea Photography by Stuart Conway distribution image contributors Carolyn Copland BP Imageshop 62 Parting shot Firefighters perform drills at the Abadan +44 (0) 20 7496 4340 Lance Bell Magic Torch refinery in the 1920s and 30s. Photography by BP Archive

© BP p.l.c., 2011 12 GoM timeline The response to the Gulf of Mexico oil spill involved thousands of people working round the clock to clean the beaches and Gulf of oil, treat affected wildlife, handle claims and stop the flow of oil. BP Magazine documents the key moments.

06 50 For the record Highlights from around the globe > Spring 2011

the quarter in numbers

7 US The number of cents per share BP paid as a dividend for the fourth UK quarter of 2010 Iraq Australia Brazil Indonesia Azerbaijan Egypt $4.6 billion Argentina BP’s replacement cost profit for the fourth quarter of 2010 $30 billion The total amount of divestment activity BP has pledged to complete by the end of 2011 $40.9 billion The total pre-tax New faces: from left to right, charge related to the Brendan Nelson, Frank L ‘Skip’ Gulf of Mexico oil spill Bowman and Phuthuma Nhleko Global: Board appointments

BP has made three new telephone multinational Nuclear Navy, joined as appointments to its board company, based in South non-executive directors in in the past six months. Africa. Meanwhile, Brendan November 2010. Each of Phuthuma Nhleko joined Nelson, a director of the these appointments are as a non-executive director Financial Services Skills regarded as the next step in in February 2011. He is the Council since 2008, and continuing to strengthen vice president of MTN Frank L ‘Skip’ Bowman, a BP’s board to meet future Group, the mobile former head of the US challenges.

04 Issue 1 2011 BP MAGAZINE It marks a major milestone SOCAR (State Oil Company in the redevelopment of of Azerbaijan Republic). the super-giant field in The two organisations will Southern Iraq. conduct joint exploration and development of the Egypt Shafag-Asiman structure in Gas discovery the Azerbaijan sector of the BP Egypt has made a Caspian Sea. significant gas discovery in the deepwater West Nile Brazil Delta area. The Hodoa Biofuels expansion discovery is located some BP is to acquire majority 80 kilometres (50 miles) control of the Brazilian Argentina the Dimlington terminal. northwest of Alexandria. ethanol and sugar producer Pan American sale The divestments will allow The well was drilled to a Companhia Nacional de Bridas Corporation has BP to focus resources and depth of 6,350 metres Açúcar e Álcool (CNAA) for agreed to purchase BP’s investment on its diverse (20,830 feet) and is the first approximately $680 interests in Pan American Central North Sea, Northern Oligocene deepwater million. When CNAA’s Energy, the Argentina- North Sea, West of Shetland discovery in the West Nile assets are fully developed, based oil and gas company. and Norway assets, and on Delta area. this is expected to increase Bridas already owns 40% of successful delivery of its new BP’s overall Brazilian the company, and will buy major projects. Meanwhile, Indonesia production capacity to BP’s remaining 60% for a BP has been awarded licence Licence awarded around 1.4 billion litres of total of $7.06 billion cash. interests in seven UK The government of ethanol equivalent per year The transaction is expected offshore exploration blocks – Indonesia has awarded BP a (9 million barrels). to be completed in 2011. its largest award in the UK 100% interest in the North for a decade. Arafura oil and gas US Australia production sharing Refining divestment New licences Global contract (PSC) in onshore BP is to halve its US BP has been awarded four Lubricants sale Papua province. The field is refining capacity with the deepwater offshore blocks BP is looking for buyers for located 480 kilometres sale of two of its US in the Ceduna sub-basin, off its world-famous (300 miles) southeast of refineries. The company the coast of south Australia. Duckhams and Veedol the BP-operated Tangguh plans to complete the sale “This is a material and early lubricant brands. Both have gas plant. of Texas City refinery and move into an unexplored been in existence since the Carson refinery (below), deepwater basin,” said BP’s invention of the motor car Azerbaijan together with its associated executive vice president of around the start of the 20th New deal integrated marketing Exploration Mike Daly. century. The successful BP has signed a new business in southern Exploration activity will be buyer will get global rights production sharing California, Arizona, and phased over six years and to a wide portfolio of agreement (PSA) with Nevada by the end of 2012. subject to detailed registered trademarks for environmental assessment. the respective master brands, as well as the UK associated product sub- Asset sale brands and iconic logos. A number of BP-operated oil and gas fields in the UK have Iraq gone up for sale. The assets Production milestone involved are the Wytch The Rumaila Operating Farm onshore oilfield in Organisation (ROO) has Dorset and all of the increased production by company’s operated gas more than 10% above the fields in the Southern North 1.066 million barrels a day Sea, including associated initial production rate pipeline infrastructure and agreed in December 2009.

BP MAGAZINE Issue 1 2011 05 Snapshot: Bob Dudley addresses the media in Biloxi, Mississippi, 30 July 2010.

06 Issue 1 2011 BP MAGAZINE Interview> Lisa Davison ➔ intervie w Photography> Harrison McClary, Graham Trott, Stuart Conway, Tim Campbell

IN THE SPOTLIGHT AN INTERVIEW WITH BP’S CEO BOB DUDLEY

The tragic events of 20 April 2010, in which an explosion on the Deepwater Horizon drilling rig in the Gulf of Mexico led to the deaths of 11 men and oil leaking into the Gulf for 87 days, have left an indelible mark on BP and its people. Not least its new chief executive.

BP MAGAZINE Issue 1 2011 07 Interview> Bob Dudley

ike a number of BP’s organisation”, with a more intense focus on part, either directly, down on the beach or American staff, Bob Dudley grew up along risk management. “BP has a choice,” he in a crisis centre, or indirectly, stepping up the Gulf Coast, spending childhood says. “It can step away from risk, or it can and filling in, making sure the rest of the holidaysL swimming and fishing in its learn from the incident and focus on risk business ran safely, reliably and performed waters. It was these close ties with the management to an accelerated degree. We well. There was this strong desire to act as region that brought him into the response need our people to think about potential stewards for the wider business. That is the early on, and made him the ideal choice to low-probability, high-impact events, and spirit we need to capture and replicate head up BP’s Gulf Coast Restoration then plan for them.” right across the organisation. Organization, an entity that was created in New steps to strengthen safety and risk “If everyone has a sense of long-term June 2010 to manage all aspects of BP’s spill management are top of Dudley’s priorities stewardship over our assets every day,” he response. It was a role he was to carry out for BP. These will help fulfil the next continues, “then people will also start to for just three months, before replacing priority – to earn back trust – and provide speak up more if they have concerns. I want Tony Hayward as BP’s chief executive. the foundation for the third – to build us to sharpen our everyday attitude to Dudley took on the top job in one of the shareholder value in a safe and sustainable operational and technical risk, to ensure it is most challenging periods in BP’s 100-year way for the long term. the norm for people on the frontline to history. As well as the complex engineering To help put safety and risk management speak about risk, and for managers to listen.” that was needed to physically stop the oil at the heart of the company, BP has This ‘sharpening’ of attitudes has been leak, the spill required a massive onshore restructured the way it rewards embodied by the creation of a new safety and offshore response, with some 48,000 performance, encouraging individuals to and operational risk (S&OR) division. people playing a role at its peak think about their personal legacy to the Headed by Mark Bly (see page 22), the (see pages 12-21). Within a few days of the company and its assets. Under the new organisation will have its safety experts accident, BP began paying claims to those structure, staff are being asked to set out embedded within BP’s operating divisions whose livelihoods had been affected, and priorities in the areas that the company to guide, scrutinise and, if necessary, later pledged $20 billion to a trust fund, to wants to see strengthened. Those priorities intervene. It will also have a central team of continue meeting those claims, as well as the include their personal commitments to specialists who will establish and update cost of Natural Resource Damages claims. promoting safety, risk management, BP’s safety and risk management standards. As efforts to cap the well were repeatedly compliance, teamwork and, crucially, how “For the most part, BP was making unsuccessful, costs continued to rise, while they will work towards long-term as well as steady progress on safety before the the company’s share price fell sharply and short-term goals. incident,” says Dudley. “However, we must its credit rating was downgraded. “I saw people work like this during the now accelerate that and make sure it Dudley says BP needs to take the lessons Gulf of Mexico response. BP employees applies everywhere. My expectation is that of the tragedy “deeply into the fabric of our from all the over the world played their S&OR will not only look at day-to-day operations, but also how we design our facilities for the future.” Another major organisational shift is occurring in the upstream business, now divided into three divisions – Exploration, Development and Production. The changes are a further evolution of work started before the oil spill and, says Dudley, will help BP focus on the capabilities it needs to manage its risks. “This is a necessary adjustment to the approach that was »

“I want us to sharpen our everyday attitude to operational and technical risk, to ensure it is the norm for people on the frontline to speak about risk, and for managers to listen.”

08 Issue 1 2011 BP MAGAZINE Diverse roles: Dudley addresses an audience of employees at the company’s offices in Sunbury, UK (below). Opposite, on the podium with Admiral Thad Allen at the Southern Governors’ Association conference in August 2010.

“If everyone has a sense of long-term stewardship over our assets every day, then people will also start to speak up more if they have concerns.”

BP MAGAZINE Issue 1 2011 09 Interview> Bob Dudley

instituted in 1992, when the company took spill had already been anticipated back in The rationale behind these action to recover from financial trouble. At summer 2010, with the temporary announcements is to retain the positions that time, we created a series of business suspension of the dividend and the that offer the greatest competitive units and we basically said to the heads of announcement that BP would divest advantage, including a series of new those units: ‘You are your own CEO’. That $30 billion in assets by the end of 2011. upstream projects, and create a portfolio planted a drive for performance within the It is also true that the shape of BP will that has the potential for stronger growth DNA of this company, and empowered never quite be the same again. In the drive from a smaller base. people to do amazing things in a difficult to create shareholder value in a safe and “It’s about ongoing value as much as period, but it also meant that systems and sustainable way, Dudley and his team are current production volumes. It’s about processes became less standardised. I don’t ‘resetting’ the portfolio to create a company quality over quantity and it’s about choices want BP to lose that entrepreneurial sense that plays to its core strengths and moves for the future, rather than the legacy of the – or its very good relationship with the currents in the global energy past,” says Dudley. “We’re focusing not so management – but by putting in place this market. One such trend is the expectation much on short-term outputs – today’s new structure, we can apply those qualities that energy demand in the mature barrels and dollars – but on inputs that at the same time as having the rigour, industrialised countries will remain fairly drive long-term value – safety, compliance, consistency and standardisation we need to flat, while soaring in Asia and other relationships, capability and technology. operate safely and responsibly everywhere. emerging economies. Consequently, as well The BP of the future will be smaller, but it The consequences of the Gulf of Mexico as divesting non-strategic assets in the will also be safer, more agile and stronger. incident are far-reaching, and, says Dudley, upstream, BP has announced it will halve It will be a company that is committed to “they leave BP a different company from its US refining capacity, with the sale of rebuilding value and trust for the long the one we were a year ago.” This is Texas City and Carson refineries. Dudley term, by doing the right things and doing certainly true in the financial sense, with pays tribute to the work done in these them well.” the company posting its first full-year loss operations while acknowledging that they The most tangible sign of progress for in 18 years. The ongoing costs of the oil now offer more value to others than to BP. shareholders is the reinstatement of a

10 Issue 1 2011 BP MAGAZINE Team player: Dudley meets employees who have made it through to the finals of BP’s internal recognition programme, October 2010.

“The BP of the future will be smaller, but it will also be safer, more agile and stronger. It will be a company that is committed to rebuilding value and trust for the long term, by doing the right things and doing them well.”

All this seems to point to the fact that shows how BP’s people all over the world the world is still willing to do business with delivered strong performance in BP. “Over the past few months, I’ve travelled challenging circumstances and it shows to China, Brazil, Russia, Trinidad, India and their dedication to doing the right thing.” Azerbaijan, and the message I’m getting is He includes the several-hundred-strong that the governments in these countries group of retirees who came back to help have been watching the response in the the company during the crisis. Gulf of Mexico very carefully,” says Dudley. Ultimately, as a result of the changes he “They believe we responded in the way they is implementing, Dudley believes people hoped any company would respond in their will look at BP in a very different light. “I’d own country. They tell me that they would like people to say BP really ‘gets it’, that it like us involved in their country because appears to be wanting to help lead the we know more about this than anyone. frontiers of risk management, as well as Indeed, we’re sharing what we’ve learned operating safely on the frontiers; that it’s very widely as people ask us to do so.” got a new way of working with contractors dividend and this, says Dudley, reflects the Much will depend on the company’s and suppliers; and that it’s lived up to its company’s stronger underlying future relationships with the US; commitments in the Gulf. That’s a tough performance. However, it has been lowered relationships that are the focus of a lot of agenda, but only then do I think we can get since the last payment in recognition that work. “BP continues to do the right thing in back on the right path. BP still needs to continue to meet its the US,” Dudley says. “We’re working with “This year is going to be one of obligations in the Gulf of Mexico and the regulators in Washington, meeting our consolidation, as we focus on completing maintain financial flexibility. obligations on the Gulf Coast, we’re our divestment programme, continue to One thing that has not changed, as far as funding various programmes. So, I feel meet our obligations in the US and bring Dudley is concerned, is BP’s distinctive pretty good about those relationships at new rigour to the way we manage risk,” he ability to look for oil, and, at a presentation the moment.” Dudley continues to make continues. “None of those things is easy, so to investors in February, he announced that frequent trips to the region to meet with it’s important to have leaders who really the company would increase its local people affected by the spill, with listen to their people. investment in exploration. Indeed, even officials and BP employees. “I don’t assume that I always know the before February, BP announced a swathe of “I’m very proud of the dedication of answer to something. I can draw on years new access deals covering the UK, people across BP,” Dudley says, believing of experience and intuition, but we need to Australia, Azerbaijan, Egypt and China. the staff’s continuing commitment was be constantly enquiring and learning and Then later in February, it announced a reflected in strong third- and fourth-quarter listening to everyone – including the major partnership with Reliance Industries results, despite the year’s overall loss. quietest voice in the room. We have to keep Limited of India, that will see BP taking a “There’s no doubt 2010 was a very difficult thinking the unthinkable – be it 30% stake in 270,000 square kilometres year for BP, yet we delivered strong operational, financial or compliance risk. (104,000 square miles) of offshore underlying performance, once you strip Nobody has all the answers. Only by exploration and production contracts as out the costs associated with the Gulf working together and making the most of well as creating a joint venture to market incident. To a degree, this reflects higher oil everyone’s capabilities will we begin to natural gas in the country. prices, but that’s not the only factor. It also move the company forward.” ■

BP MAGAZINE Issue 1 2011 11 ➔ Gulf of Mexico Deepwater Horizon> Timeline

Source: bp.com and restorethegulf.gov RESPONSE TO A CRISIS 20 APRIL-01 OCTOBER

20 April An explosion and fire occur on the Deepwater Horizon (DWH), Transocean’s semi- submersible rig in the Gulf of Mexico. Eleven of the 126-member crew 24 April are missing. Transocean had been drilling an Oil spill response effort gets under exploration well for BP. way, including skimming of oily water from the surface and deployment of protective boom. US COAST GUARD

APRIL

21 April 22 April 23 April 25 April 27 April 28 April The DWH continues to The DWH sinks. BP The search for the Efforts begin to US Secretary of First controlled burn is burn. Eleven people activates an extensive missing 11 crew activate the blowout Homeland Security carried out. remain missing. Search oil spill response that members is preventer (BOP), using Janet Napolitano and and rescue effort is includes a flotilla of suspended, after submersible remotely Secretary of the coordinated between response vessels, covering 12,950 square operated vehicles Interior Ken Salazar Transocean’s protective boom and kilometres (5,000 (ROVs). Ultimately, set out details of a emergency and family dispersant. Plans for square miles). these prove joint investigation of response team, BP and drilling a relief well unsuccessful and the incident. the US Coast Guard. are initiated. the BOP does not seal the well.

Field operations are co-ordinated from Houma, Louisiana, with almost 500 people deployed.

12 Issue 1 2011 BP MAGAZINE Photography> Marc Morrison, Tim Campbell, Joshua Drake, Bobby Chapman, Rocky Kneten & Harrison McClary

On 20 April 2010, tragedy struck in the Gulf of Mexico. An explosion and fire on the Deepwater Horizon rig led to the deaths of 11 men and a major oil spill. While the leaking well was finally capped on 15 July 2010, BP continues to play an active role in the affected communities, with offices in the four Gulf states of Louisiana, Alabama, Mississippi and Florida. The company is paying the legitimate claims of individuals, businesses and government entities impacted by the accident, is working with federal and state trustees to assess the environmental impacts of the spill and supporting efforts to promote tourism. Here, BP Magazine charts some of the key dates of an unprecedented response to an unprecedented event.

4 May More than 2,000 volunteers are trained to assist in the response effort. Volunteers include local fishing crews, whose boats can be used as ‘vessels of opportunity’ to assist contractors in deploying boom.

4 May BP begins paying claims to those with losses caused by the spill. 30 April The first oiled bird – a northern gannet – is captured and treated by TriState Bird Rescue and Research, in Venice, Louisiana, contracted by BP to rehabilitate wildlife.

MAY

30 April 1 May 2 May 5 May 9 May 16 May Staging posts for boom Former head of the US Drilling begins on a BP makes $25 million Efforts to place a The Development and other equipment Coast Guard Admiral relief well designed to block grants to each of containment dome Driller II (DDII) begins are set up in Venice, Thad Allen is intercept and the states of Louisiana, over the main leak drilling a second, back- Louisiana; Pascagoula designated National permanently seal the Alabama, Mississippi point are suspended, up relief well. and Biloxi, Mississippi; Incident Commander leaking oil well. The and Florida, to help after a build-up of Mobile, Alabama; and for the US Development Driller III them implement oil hydrates prevents Pensacola, Florida. Government’s (DDIII) is drilling spill contingency successful placement. coordinated response. the well. plans.

BP MAGAZINE Issue 1 2011 13 17 May 26 May BP announces grants ‘Top kill’ operations to help Gulf Coast begin in an effort to states promote stop the flow of oil by tourism – $25 million injecting heavy to Florida and drilling fluids into $15 million each to the well. Alabama, Mississippi and Louisiana.

29 May Plans begin for the deployment of a containment cap – known as the lower marine riser package (LMRP) – from the Discoverer Enterprise vessel, from which oil and gas can be piped to the surface.

24 May BP commits $500 million to the Gulf of Mexico Research Initiative (GRI) – a10-year open research programme to study the impact of the spill and response on the environment.

MAY JUNE

18 May 25 May 29 May 4 June 8 June 10 June A riser insertion tube BP’s internal BP announces the BP announces second The LMRP cap is now BP provides additional tool (RITT) begins investigation team suspension of the top advance payments collecting 15,000 $25 million grants to collecting an estimated says it is focusing on kill procedure. It has of claims for those barrels of oil a day. Florida, Alabama and 2,000 barrels of oil a seven mechanisms, not been able to with losses caused Mississippi. day. Gas is flared including the well overcome the flow of by the spill. onboard the casing, pressures oil, despite 30,000 Discoverer Enterprise. tests, procedures to barrels of heavy mud The Discoverer detect hydrocarbons being pumped into Enterprise begins in the well, and the the well. receiving oil and gas failed BOP. following the successful installation of the LMRP cap.

14 Issue 1 2011 BP MAGAZINE 16 June A second containment system is operational, carrying oil and gas from the MC252 well to the Helix Q4000 vessel. The gas is flared on board.

22 June Net revenue from the sale of recovered oil is to be donated to the National Fish and Wildlife Foundation. $5 million is donated immediately.

6 July Vessels of Opportunity programme enhanced to make better use of local commercial and charter fishing vessels and crews.

JULY

15 June 16 June 17 June 19 June 23 June 10 July Fast-track funding of Following a meeting BP chief executive Tony Claims payments top BP sets out the role The LMRP cap is $25 million is with President Obama, Hayward testifies to US the $100 million mark, of the Gulf Coast removed in preparation announced as part of BP agrees to create a Congress. with 31,000 cheques Restoration for its replacement the environmental GRI $20 billion trust fund issued in seven weeks. Organization, including with a sealing cap, – to support studies at to meet obligations clean-up and capable of increasing Louisiana State arising from the spill. remediation, liaising containment capacity University, Florida It is also announced with public officials, or potentially shutting Institute of that individual and communicating with in the well. Oceanography, and business claims will be the public and the Northern Gulf administered by Ken implementing the Institute consortium. Feinberg, known for his compensation fund. handling of prior claims facilities.

BP suspends dividend payments for the rest of 2010.

BP MAGAZINE Issue 1 2011 15 3 August BP begins injectivity testing in advance of static kill operations.

5 August Claims payments top $300 million. More than 40,000 individuals and businesses have been affected by the spill.

15 July Oil ceases to flow into the Gulf of Mexico, as a well integrity test begins and the ‘three ram capping stack’ is closed, shutting in the well.

JULY AUGUST SEPTEMBER

12 July 27 July 4 August 5 August 21 August 2 September Sealing cap is put in BP announces that Bob The National Oceanic BP carries out Forty-eight-hour The capping stack on place with the Dudley will take over and Atmospheric cementing operations ambient pressure test top of the DWH BOP is installation of the from Tony Hayward as Administration and to seal the well. is deemed successful. removed by the three ram capping BP’s group chief Department of the drillship Discoverer stack. executive from Interior announce that 16 August 23 August Enterprise. 1 October. the vast majority of the BP announces Thad Allen announces 16 July oil from the spill has $52 million of funding that 90% of the hard 3 September Claims payments top BP also announces either evaporated or for support and boom deployed has The DWH BOP is $200 million. To date, it has taken a been burned, skimmed, outreach on been removed. successfully removed 32,000 claimants have $32.2 billion pre-tax recovered from the behavioural health from the well by the received one or more charge for the spill, wellhead or dispersed. across the Gulf Coast Claims payments Helix Q4000. The DDII payments. including the $20 region. reach almost installs a new BOP. billion claims fund, Tests show the MC252 $400 million. The Gulf and will sell up to $30 well appears to have 18 August Coast Claims Facility billion worth of assets reached a static BP flushes drilling mud (GCCF), headed by Ken as part of prudent condition after eight and hydrocarbons Feinberg, begins approach to managing hours of pumping mud from the MC252 well in handling individual its finances. in the ‘static kill’ advance of a pressure and business claims. operation. test to ensure the well is secure.

16 Issue 1 2011 BP MAGAZINE 26 August After almost two months of work to translocate sea turtle nests on Florida’s Northwest coast and Alabama’s coast, the operation is suspended as surveys find healthy, unoiled Sargassum available for hatchlings entering the Gulf. This type of seaweed is the main habitat for hatchlings.

OCTOBER

7 September 8 September 16 September 19 September 29 September 1 October BP announces it is An investigation led by Relief well drilled by Admiral Thad Allen BP announces it will Bob Dudley becomes providing $10 million Mark Bly, BP’s head of the DDIII intercepts confirms that well kill create a new safety chief executive officer to the National Safety and Operations, the annulus of the operations on the division with sweeping of BP. Institutes of Health concludes that no MC252 well. Total MC252 well in the Gulf powers to oversee and (NIH) under the GRI, to single factor caused measured depth of the of Mexico are audit the company’s support a study of the MC252 tragedy, but annulus intercept complete, with both operations around the potential public health that a sequence of point is 5,479 metres the casing and annulus world. BP also reveals issues relating to the failures involving a (17,977 feet). of the well sealed by plans to re-structure oil spill and other number of different cement. its Exploration & spill-related health parties led to the Production segment research. explosion and fire. The from a single business report was conducted into three divisions – independently by a Exploration, team of more than 50 Developments and technical and other Production. specialists, drawn from inside BP and externally.

BP MAGAZINE Issue 1 2011 17 ➔ Gulf of Mexico

Crisis response> The subsurface challenge

A COMPLEX OPERATION Throughout the response, BP kept the public informed of its operations via a series of illustrations. The one opposite is perhaps the most recognisable, due to its fish’s eye view of subsurface activities. With the large vessels sometimes having to move within 12 metres (40 feet) of each other, this diagram shows the complexity of the operation. It also reveals the level of activity on the seafloor and the need for care when moving any vessel, no matter its size, since many were supporting tethered remotely operated vehicles or were connected to the seafloor via pipes. For this reason, the dedicated simultaneous operations (SimOps) team was crucial in keeping the subsurface response running.

Aerial view: the MC252 well site on 10 July 2010. The Discoverer Enterprise sits at the centre, with the Discoverer Inspiration arriving to the right. On the left sit the DDII and DDIII and just in front of the Enterprise sits the Helix Q4000.

18 Issue 1 2011 BP MAGAZINE BP MAGAZINE Issue 1 2011 19 ➔ Gulf of Mexico Crisis response> The Gulf Coast region THE ONGOING RESPONSE A massive response was mounted along the Gulf Coast in the hours and days following the oil spill, and while the well is now capped, BP remains committed to meeting its obligations in the region.

MISSISSIPPI Total BP payments and investments LOUISIANA $550,900,000 Total BP payments and investments $2,006,450,000 Biloxi TEXAS

New Orleans

Houston

GULF OF MEXICO

work tirelessly to help BP live up to its do around the world. In Alabama, COMMUNITY commitments, I see myself as a liaison maintaining a strong local presence and COMMITMENT between the company and key living up to our commitments is part of the stakeholders. It’s my job to manage risk, to journey toward recovery. Ayana McIntosh-Lee is one of the BP identify opportunities and to ensure the employees who have moved to the lines of communication remain open. Why did you agree to be that Gulf Coast to provide assurance to representative? local and state stakeholders that the Why is it important that BP maintains I visited coastal Alabama years ago and was company will live up to its a permanent presence in your region? struck by its beauty and home-town obligations. She talks to There are some in the community who feel. During the response, I was deployed to BP Magazine about a typical day and believe that BP will pack up and leave any Mobile and was saddened to return under why it’s important BP maintains this day. However, in December, we opened the the circumstances. Despite the challenges permanent presence. BP GCRO’s Alabama office in Gulf Shores, presented by the spill, I found the people which currently has more than 100 welcoming and appreciative of any What does your role involve? employees and contractors overseeing assistance that could be provided. It didn’t As the general manager for external beach clean-up operations and external take long to realise that this was more than a relations, my role involves leading and relations activities. This accident was a job. It was an opportunity to make a managing all aspects of the BP Gulf Coast reminder that the people along the Gulf difference for BP and the impacted Restoration Organization’s (GCRO) external Coast are our neighbours. They are the fence community. Fortunately, I’m surrounded by relationships in Alabama at the local and line community to our Gulf of Mexico a talented, committed team that is state level, including community, operations, and it’s important that we build determined to make a positive difference. government and media relations. Along and maintain a long-term, mutually- They understand, as I do, that our with a dedicated team of professionals, who beneficial relationship with them, just as we neighbours are counting on us.

20 Issue 1 2011 BP MAGAZINE 95 90 As of 17 March 2011, the state payments include payments to government entities for contingency planning, response and removal advances and other damages; claims payments to individuals and businesses by BP (through 23 August 2010) and by the Gulf Coast Claims Facility (since 23 August); payments to Vessels of Opportunity participants, tourism, Natural Resource Damage Assessments, research, behavioural health, and community contributions.

AREA ENLARGED ALABAMA Total BP payments and investments $998,200,000 km 100 200

Mary Esther 30

GCCF claims centre

BP office Gulf Shores BP crisis response centre

FLORIDA Total BP payments and investments $1,678,200,000 Incident Location

RESPONSE STATISTICS 48,000 Number of people deployed at peak 13 million feet Miami Total amount of boom deployed at peak 125 Number of aircraft deployed at peak >6,500 25 Number of total active vessels deployed at peak 2,079 Total number of visibly oiled birds collected alive 2,263 Total number of visibly oiled birds collected dead

Sources: BP Annual Report; Deepwater Horizon Response Consolidated Fish and Wildlife Collection, 25 January 2011. 85 BP MAGAZINE Issue 1 2011 21 80 ➔ intervie w Interview> Nic Welsh Photography> Rocky Kneten, Marc Morrison and Stuart Conway

AN INTERVIEW WITH BP’S HEAD OF SAFETY & OPERATIONAL RISK MARK

BLYSix months since the release of the Bly Report, BP’s internal investigation into the causes of the Deepwater Horizon explosion and subsequent oil spill, its author, Mark Bly talks to BP Magazine about the company’s new safety and operational risk division and what lessons the company can learn from other industries.

22 Issue 1 2011 BP MAGAZINE BP MAGAZINE Issue 1 2011 23 “Our deployed S&OR teams provide an extra set of eyes and ears with respect to safety and operational risk on the frontline. They also provide tailored coaching and support, coordinating expert advice and input from the central teams as appropriate.”

What is the role of the new Safety and risk on the frontline. They also provide Operational Risk (S&OR) organisation? tailored coaching and support, Our role is to drive safe, compliant and coordinating expert advice and input reliable operations across BP. We do this in from the central teams as appropriate. four ways. First, we set and update the requirements that are used across the How does S&OR relate to the line business for safety and operational risk management in each operation? management. Second, we provide expert A key part of our role is to provide an scrutiny of safety and risk, independent of expert view on risks and how they are line managers, advising, examining and managed that is independent of the line auditing what our operations do. Third, we management. But I must emphasise that provide deep technical expertise to the this does not mean that business leaders operations. Fourth, we have the ability to hand over safety to us. It is absolutely clear intervene if needed to cause corrective that the people who run operations – the action. We have a central team of line managers – are accountable for specialists, as well as more than 500 people managing safety and compliance in those who are deployed in BP’s businesses, operations. They have the responsibility to providing guidance and scrutiny, and manage risks and bring together people examining how risks are being assessed on with the right skills and competencies. But rigs, at refineries and across BP’s operations. they need advice and scrutiny from people who are specialists in safety and risk. Our What is the difference between the teams will have the authority we need to central team and the deployed staff? intervene if that becomes necessary, but much more active in working with the The central team is the source of BP’s our aim is to have all risks managed in operations, to understand the risks and subject matter expertise. They are the such a way that we don’t have to use how they are being managed. custodians of group requirements, as well that authority. as audit and capability programmes. They Can you give any examples of where include many of BP’s top engineers and BP had a safety organisation prior to S&OR is already in action? safety specialists, several of whom have the Gulf of Mexico oil spill, so what is The greatest measure of the S&OR experience of other industries where major new about this? organisation’s success is when we work hazards have to be managed. Several things. First, we have more collaboratively with the line to drive safety Our deployed S&OR teams work with authority than before. S&OR has a seat at and risk reduction. There are several cases the line businesses – ranging from the top management table, and we have of this. For example, shutting down a upstream oil and gas development and also put in place specific decision rights, production platform to repair fire water production to refineries, petrochemical veto rights and intervention rights. Second, pumps, instead of continuing to let them plants and retail networks. They help the the 500-plus S&OR specialists who are run while maintenance work was carried businesses apply BP’s standards in their deployed locally to work alongside our out. It is a costly thing to do, but it is the own situations and they report back to the businesses worldwide report to my right thing to do. There are already a group on how operational risks are being organisation through the deployed S&OR number of recent cases where drilling rigs managed business by business. In other teams. They are independent of line have either been turned away or we are words, they provide an extra set of eyes and management and this creates stronger negotiating modifications before we are ears with respect to safety and operational checks and balances. Third, S&OR will be prepared to use them.

24 Issue 1 2011 BP MAGAZINE Interview> Mark Bly

What lessons can BP learn from other safety, is a former director of the UK’s achieved through strong engagement with industries? Dounreay nuclear power plant and suppliers and contractors to achieve We have to realise that other sectors had previously served as a naval engineer on a alignment between operating standards other experiences and have developed Polaris submarine. John will take on and safety management procedures. As a safety and operational risk management in responsibility for BP’s standards being clear, member of the board of SECCO – our different ways. Good examples are the civil coherent and simple to use. He acts as head petrochemicals joint venture in China nuclear industry, the nuclear navy and the of profession for all engineers across the BP (see page 44) – Jeanne oversaw a focus on aerospace industry. We can learn from Group. John Sieg, BP’s group head of safety that led to a remarkable 88.6 million these perspectives. Those who have operations and the Operating Management hours worked without a single fatality or excelled have demonstrated a systematic System, has 37 years of operations major process safety incident. approach, an ability to learn and that they leadership in DuPont and BP. We also have honour their standards. people, such as Robert Riley and Jeanne It’s been six months since BP’s internal Johns, who have been named into senior investigation was released – what What sort of experience do members of S&OR positions because of their track progress has been made in the your leadership team have? records in safety within BP. Under Robert’s upstream specifically to respond to the We have some very experienced people in leadership, BP Trinidad and Tobago incident and implement the S&OR, with a wide variety of backgrounds, transformed its safety performance from recommendations? including nuclear, petrochemicals and the being bottom of the league in the upstream The first thing that BP did was to accept all military. For example, John Baxter, our business to top of the league in just four 26 recommendations. Implementing them group head of engineering and process years, a significant part of which was requires detailed work. Members of the »

BP MAGAZINE Issue 1 2011 25 Interview> Mark Bly

investigation team have provided input to used to shut in the Macondo well. We also management, compliance, teamwork, the project team that is working on continue to enhance the ‘ranging’ capability-building and long-term goals – as implementation of the recommendations. technology that saved time during the well as this year’s goals. We’re also making And I see solid progress in many other relief well operation by enabling us to use it a priority for managers to be good ways. For example, a centralised wells sensors to detect the location of the target listeners – and one reason for this is that organisation has been created to manage well without removing the drill bit being you may not realise you have a problem drilling activities to consistent standards used to drill the relief well. unless you listen to everyone. The other across the globe. Independent third-party side of that coin is that we are reinforcing certification of our drilling contractors’ BP has changed the way it rewards its the encouragement for everyone to speak subsea blowout preventers has been employees and has asked all staff to up more if they have a concern. Everyone completed to check the testing and include safety-specific priorities when must feel able to raise their hand. We’re maintenance of their emergency systems. they set their priorities for the year asking people to state explicitly how they The auditing of the rigs that drill our wells ahead. Why is that important? will demonstrate these qualities in their has moved across into my S&OR audit We want to reward the right things, and top work, and rewarding them according to team. Work is also underway to enhance of the list is safety and risk management. how well they do so. This very directly the standards for cementing and well So, in our performance management incentivises people to promote safety, to act integrity testing, including a new approvals system for 2011, we’ve asked everyone to as one team and to work to build process and stringent contract laboratory say how they will contribute to safety, risk sustainable long-term value. ■ quality audits. In the North Sea, the team is building a next-generation capping stack, based on what we learned from the one “The greatest measure of the S&OR organisation’s success is when we work collaboratively with the line to drive safety and risk reduction.”

26 Issue 1 2011 BP MAGAZINE Photography> Marc Morrison BP Faces

LEADING BY EXAMPLE Randy Fletcher & Brad Byczynski Randy Fletcher and Brad Byczynski have five days to make a room full of experienced BP emergency responders (fire fighters) think of leadership in a new way. That means five days to challenge the participants’ existing notions of what leadership is and help them build on their existing skills. In their day jobs, Brad is discipline leader for crisis management at Naperville, Illinois, while Randy is HSSE manager at Toledo refinery’s reformer project in Ohio. The goal of the bi-annual, voluntary course is to plant the idea that managing and leading people require very different skills. “In a crisis, you need a leader,” says Randy. “We try to ensure they’re out there in BP.” Brad: “First, we have to earn their trust and confidence in our experience-based knowledge.” Randy: “Then, we have to guide them in rebuilding a stronger vision of what makes a leader.” Brad: “Plus, help them become a leader that people will follow in a crisis.” Randy: “It’s a pretty intense five days. Ultimately, it’s up to the individual to decide to re-create themselves into a valuable leader.” ■

BP MAGAZINE Issue 1 2011 27 ➔ upstream

Gas development> Oman

28 Issue 1 2011 BP MAGAZINE Report> Amanda Breen Photography> Richard Davies + Mehmet Binay

Team spirit: workers (main image) lay power cable to the new gas facility to connect it to the existing power supply. The work has to be carried out in this way due to the soft sand terrain. Below, an Omani lady shows off her hennaed hands. This traditional art involves painting intricate patterns; workers out in the field; and 60% of BP Oman’s staff are now Omani nationals.

OMAN LAYING THE GROUNDWORK Four years after signing an exploration and production sharing agreement with Oman, gas has begun to flow through a BP test facility. The achievement marks a major milestone in what could become a flagship project for BP and a chance for Oman to underpin its energy reserves for years to come.

BP MAGAZINE Issue 1 2011 29 Work and play: personal safety is crucial in this inhospitable environment, so a reflective jacket and parasol are important tools for the man charged with alerting drivers to upcoming roadworks. Below, street kids practise their cricket strokes near the Muttrah souk in Muscat.

30 Issue 1 2011 BP MAGAZINE Gas development> Oman

When Oman’s minister for oil and gas needs to put his country’s demand for natural resources into perspective, he chooses a striking image. “I tell people that we drink gas here and breathe it, too,” says the man who is charged with ensuring that the oldest independent state in the Middle East has enough gas to keep the water desalination plants pumping and the air conditioners whirring.

The Sultanate only need look to its To continue this economic growth, neighbours to witness what happens when though, Oman needs to be self-sufficient in there’s even a temporary blip in the energy its energy supply. With declining oil supply; in 2010, extreme summer production – and reserves that are not temperatures prompted spikes in power comparable to its Gulf neighbours – demand that resulted in high-profile accessing the proven natural gas deposits electricity outages across the Middle East, buried deep beneath the desert has from Amman to Sharjah. It’s not a scenario become a priority. that Oman wishes to face as well. Recovering some of those resources is But just maintaining the needs and now also becoming a reality, as BP Oman’s comforts of today is not the only concern six-year project to appraise and develop for the minister, Dr Mohammed bin Hamad two gas fields – Khazzan and Makarem – in Al Rumhy; Oman also has big plans for the Block 61 has reached a significant future. In its latest five-year development milestone. Four years after the company plan, the Gulf state pledged to spend signed an exploration and production $78 billion, through to 2015, with the sharing agreement with the government, majority to be invested in infrastructure, gas is now flowing into a test facility that including roads, hospitals and education. records vital data from the reservoirs. Not to say that this country on the “This really is a challenging project, but southeastern corner of the Arabian we’re finding that by applying the right peninsula has been left behind in terms of technology, it is possible to open up these modernity; it has come a long way in the reserves,” says Jonathan Evans, vice 40 years since Sultan Qaboos bin Said came president for BP Oman. » to power. Omanis can now expect to live more than a quarter of a century longer than their predecessors in 1970, thanks to improved healthcare. The economy has IRAN PAKISTAN also boomed, with gross domestic product QATAR growing from $256 million in the 1970s, to PERSIAN an estimated $62.25 billion in 2010, GULF according to the International Sohar GULF OF OMAN Monetary Fund. Mina Qabus Such prosperity is much in evidence on UAE MUSCAT INDIA the ground, where, in a nod to the Ibri significance of both tradition and innovation, Sur old and new sit comfortably together: Nizwa abandoned forts and watchtowers overlook SAUDI ARABIAN Khazzan SEA the sleek, multi-lane highways of the capital, ARABIA Muscat. White-washed low-rise buildings, 20 with their domes or arabesque windows, co- OMAN AREA Duqm ENLARGED exist with grand, beachside hotel complexes, while the shaded alleys of the Muttrah souk, Thamarit crammed with everything from bright white dishdashas to framed khanjars, provide an YEMEN km 250 500 16 alternative to the gleaming shopping malls Salalah that house Gap and Subway. 60 68

BP MAGAZINE Issue 1 2011 31 Field operations: more than 500 people are at work out in the desert, helping to construct new gas facilities. Opposite, engineers work at the fracturing site.

Discovered in the late 1990s, Khazzan monitoring of flow rates, reservoir decline standards among local contractor and Makarem proved hard to develop at and gas composition will paint the big companies became a priority soon after the the time, as they contain what is known as picture of the fields’ potential. Rather than project began. To protect the workforce ‘tight’ gas. This is held in reservoirs where flaring the tested gas, once compressed, it from the hazards associated with seismic the permeability of the rocks is so low that runs through export lines to a government- surveys, drilling operations or pipeline hydrocarbons cannot easily flow into owned processing facility, 33 kilometres construction, BP increased its number of production wells without help. (20 miles) away, to prepare it for the HSE advisors in the field to oversee safe In its North American gas business, BP national market. practices, and determine that jobs were has proven adept at accessing such ‘tight’ The introduction of hydrocarbons into a carried out with properly certified reservoirs, and it is this expertise that has new facility has its risks, meaning the BP equipment. “It’s been a learning curve for been brought to bear in Oman. Techniques Oman team has focused on rigorous start-up some contractors to understand that we’re such as hydraulic fracturing stimulation procedures. Gary Campbell, BP health and willing to stop the job if they’re not doing it mean that BP is achieving more than safety manager for the Middle East and safely,” Campbell says. double previous flow rates. Pakistan, says, “Once the system is operating, Personal safety also requires attention in “We’ve seen encouraging results so far there are high pressures, high temperatures this inhospitable and isolated desert setting. from some of the appraisal wells,” Evans and electricity flowing through, so our main Block 61 is located around 400 kilometres says, “and now we’ve brought the extended concern is implementing the right processes (250 miles) southwest of Muscat, but the well testing [EWT] facility online, gas is so the plant can work as it is designed to, five-hour drive – prolonged by the need to flowing into the compressor station. This safely and efficiently. negotiate the graded roads on the latter part phase is about acquiring production data “We take a multi-disciplinary approach of the journey at a careful speed – may as for up to nine months, to understand how to start up the equipment, what we call a well deposit you on a different planet. the wells decline, and what that means in ‘Go-No Go’ process. That’s essentially a It’s a place where miles of dusty terrain, terms of how much gas could be delivered checklist for all areas of the operation – from combined with the sun’s bleached haze, from the entire field.” testing the emergency response plan, to induce an hypnotic effect and where The newly-constructed EWT site was ensuring the right people have completed protection from the elements is always a inaugurated by the UK Prime Minister the appropriate training – so that everyone concern. It seems reasonable then to spot a David Cameron and Minister Al Rumhy is satisfied we are ready to go.” man in a reflective jacket, indicating the (see page 34). This year, five appraisal wells More than 500 people are at work in the start of road works, with a red flag in one will be tied into the site and the field operations, and improving safety hand and a garden parasol in the other. Or to witness a group of drivers taking a break on a rug laid out beneath the enormous Oman in numbers undercarriage of their transporter trucks, to Land area 309,500 km sq Population total (2009) 2,845,415 make the most of the only shade. Adult literacy rate 87 % (of people 15 years+) Conditions can change rapidly, too; late Urban population (2005) 72% afternoon sandstorms suddenly whip up to Travel & tourism contribution to GDP (2010) 7.6% or $4,359 million create near-zero visibility, with gusting Source: World Bank, World Travel & Tourism Council winds that feel as hot as a hairdryer. Keeping people safe here means taking Then and now into account all the environmental factors 1970 2008 – while workers are accustomed to facing Life expectancy at birth 49.4 years 75.9 years summer temperatures of up to 50°C (120°F), Hospitals 2 58 food and water quality needs to be Schools 3 1,283 Telephone subscribers 557 3,493,527 maintained in such circumstances to Gross domestic product $256 million $59.94 billion prevent contamination. Source: National Economy Ministry, International Monetary Fund Continued on page 36 »

32 Issue 1 2011 BP MAGAZINE Gas development> Oman

> TECHNOLOGY GETTING GAS OUT OF A TIGHT SPOT

In Block 61, gas lies buried produced some surprises for BP’s the drill bit and turbine In 2010, BP completed the under rock so hard that drilling team. assembly that power through largest-ever gel frac operation drilling, in places, can only “We were able to drill the the rock were carefully chosen, in Oman, pumping 1 million progress at around half a horizontal section both faster along with the drilling fluid pounds of proppant into the metre every hour. Four and farther than we had that maintains good hydraulics Khazzan-6 well. BP’s bespoke, stacked reservoirs are originally anticipated,” says in the borehole, important for multi-disciplinary approach to found at 5-5.5 kilometres John O’Neill, BP’s vice president cleaning out the drilled hole stimulating each well has made (3.1 and 3.4 miles) deep, for drilling and completions for and avoiding any hole all the difference, according to where temperatures range the Middle East. “We had collapse and allowing Martin Rylance, senior from 140-160°C (280-320°F). planned for 500 metres continued drilling. petroleum engineer and The first step in appraising [1,640 feet], but were able to Once complete, all the wells advisor, who leads the fraccing the reservoirs was to reprocess progress out to 750 metres need to be stimulated for gas to operations. existing seismic data, as well as [2,460 feet], which was very flow. Hydraulic fracturing “Every well is different, and conduct a new survey in 2008 encouraging. We are now operations – or ‘fraccing’ – in each is studied in detail to make covering 2,800 square planning to extend out to 1,000 the Khazzan/Makarem vertical sure we take the optimum kilometres (1,080 square miles). metres [3,280 feet] on the next wells have achieved significant approach. Our use of downhole This subsurface data helps to horizontal, and possibly further results so far. This technique gauges to read pressure and pinpoint natural fractures in the test our capacity to do so for sees fluids and gels pumped temperature, and bespoke rock that can indicate the best future field development.” into the well, under pressure, chemistry to improve the flow- locations to drill appraisal wells. That achievement is and down into the reservoir to back and clean-up are also Seven of a planned nine wells attributed to two factors. Firstly, create cracks in the rocks to proving vital. are now complete, including one a thorough understanding of improve permeability. Materials “At this stage, we want to horizontal well that targeted the the subsurface environment known as proppants – man- learn the most we can from third reservoir down, the Amin. allows the drillers to direct the made sand-like products with these wells, as they are like What was anticipated to be a drilling path along the axis of tremendous crush resistance – huge data surveillance engines difficult exercise, given the stress in the rocks. Selecting the then hold these cracks open. that allow us to construct some hardness of the rock at a depth most appropriate down-hole The gas then flows through more general approaches for of 5,200 metres (17,000 feet), equipment was also important; the fissures. full-field development.”

BP MAGAZINE Issue 1 2011 33 Gas development> Oman

> INTERVIEW OMAN’S MINISTER FOR OIL AND GAS DR MOHAMMED BIN HAMAD AL RUMHY His Excellency Dr Mohammed bin Hamad Al Why is it important to build a local business Rumhy has served as Oman’s minister for oil with local staff? and gas since 1997. Previously, he was The oil and gas industry in this country has a assistant dean of Engineering at Sultan reputation for developing not only Qaboos University and worked for hydrocarbon resources but people, too. It’s Petroleum Development Oman in the 1980s. another extremely important part of our He gained his PhD in petroleum engineering business: it is necessary to build good from the Royal School of Mines, Imperial relationships, to develop people and to College London. develop resources. “We now see people Can you explain why Oman is so in need How can BP contribute to this ongoing skill in Muscat moving of gas? development? from one company Our power needs are ever-increasing; we have It is good for the country and for our partners, very ambitious programmes to build new such as BP, to be successful in creating talent, to another, which is towns and cities – like Duqm, which is an particularly among locals. We now have healthy. So, I’m sure industrial city with a new airport and railway sources where we can turn for the right people system. Anytime that you start thinking about and then develop them through different that BP, as a good development, you can smell gas – either it will initiatives, such as BP’s Challenge programme, corporate citizen, fuel the growth or there is a lack of it. When as well as our own. we talk about tourism, we want to build hotels People here have tended to associate will contribute to and resorts. Every time I hear these ambitious themselves with one employer for a long time. this progress and plans, I worry whether we have enough gas to But that is changing. We now see people in provide the energy and water needed. That’s Muscat moving from one company to another, continue to nurture why I say we drink gas here, because it powers which is healthy. So, I’m sure that BP, as a good talent in Oman.” our water desalination plants. So, for us, in the corporate citizen, will contribute to this Ministry, we do not want to be the reason why progress and continue to nurture talent we don’t develop. BP is making headway in in Oman. helping us solve this uncertainty. What are some of the ministry’s Why does technology have such a big part to expectations for this project in 2011? play in the Khazzan/Makarem project? With gas flowing into the receiving facility, We know there is gas in these reservoirs, but we this is a big milestone for the are not sure how we can succeed in releasing it Khazzan/Makarem development. The question and making it flow. Dealing with the now is how long these wells can flow, what subsurface, there are always unexpected factors their rate is and all the technical aspects that beyond our control to consider. However, with come along with that. We will start to put all the knowledge and technical know-how that those pieces together, as it is extremely exists in BP, the results from the wells and important for us to understand the behaviour fracturing programme are very encouraging. of the reservoir.

The Ministry of Oil & Gas is working closely If the project is deemed commercially viable, with BP to develop these reservoirs. What do and full-field development goes ahead, what you believe are the foundations for a would it mean for Oman in terms of the successful partnership? provision of additional hydrocarbon Personally, I like to understand our partners and resources? for them to understand us. We have a strong It could be huge. If this project turns out as we relationship with BP; if we get good results for hope, it will change the way we think of our the project, we will be pleased, but even if we energy needs in this country. I hope the don’t, we want to keep that friendship and opportunities we’ve had in recent years will understanding. We think Oman has a lot to come again; we missed some because of fear of offer international companies and a good gas availability. If we can produce certain partnership is something we can create. Can we volumes of gas for the next 20 or 50 years, we create a good reservoir? Probably not – that’s can do a lot. And that, for a country of our size, down to Mother Nature – but in terms of things will change things – I’m looking forward to we can do, I think we are being successful. that change.

34 Issue 1 2011 BP MAGAZINE BP MAGAZINE Issue 1 2011 35 Desert setting: Block 61 is located around 400 kilometres southwest of Muscat in the middle of the desert. Below, the souk at Muttrah is packed with traditional Omani goods.

Continued from page 32 » looking to significantly increase that local staff are progressing rapidly in the recruitment this year by raising our profile company. Khalid Al Kindi, who joined the Leaving the residential camps behind, locally,” says Evans, adding that technicians procurement and supply chain long distances and variable road conditions – who undertake four years training in their management team with nine years’ make driving challenging. Vehicle chosen field – will also be hired in 2011. experience, is one such example. inspections and the use of in-vehicle BP has already surpassed its initial “I arrived with plenty of industry monitoring systems to track behind-the- government target for the proportion of exposure, but I’ve learned so much in a short wheel behaviour help to manage this risk. national staff within the organisation. The period; most importantly I think are the Road safety initiatives have also put the undersecretary at the Ministry for Oil and leadership skills and international issue in the spotlight. Kamil Al Lawati, HSE Gas, Nasser bin Khamis Al Jashmi, who perspective,” says Al Kindi, who advanced to team leader, says, “We launched an chairs the joint management committee of become team leader, and has now taken on a educational campaign, together with major government and BP representatives that managerial role in BP’s business in Jordan, in contractors in Block 61, where participants oversees the project’s activities, is pleased less than four years. For their part, national used simulators to experience a vehicle with the progress so far. staff offer vital local context to the business, rollover and show why mobile phone use “For BP to reach a level of 50% thanks to their deep understanding of the while driving is banned in BP. Around 800 Omanisation, as we call it, within four market in which the company operates. people took part, and it was well-received. years, is a very good achievement,” he says. Sharing expertise like this – between Our focus now is to make sure our driving “The Ministry of Manpower has set a target local and international colleagues, and on a policies are well-communicated and for all oil and gas companies operating here broader scale between country and enforced through regular monitoring.” to reach 90%; that is achievable, but we company – is a natural outcome of Such lessons about the everyday also have to allow new companies to meet working together in partnership. Of course, challenges of operating in Oman are that level within a realistic timeframe. the ultimate objective of this co-operation invaluable for BP in formulating plans for “It needs to be done in the proper way, is to secure future gas production from the the future, when net production in the without compromising the project’s Khazzan and Makarem fields, a result that fully-developed field could yield up to objective, which is to produce gas in a safe would bring mutual benefit. 1 billion cubic feet of gas a day. If the and reliable manner. That requires skilled, For BP, it would mean establishing a project is given the green light in late 2012, well-trained people and we wish to see flagship project in the Middle East, where gas could flow by 2016. some of BP’s knowledge and experience the company took its first pioneering steps In the meantime, the company is transferred to locals.” more than 100 years ago. While for Oman, making a substantial investment, not just in With a 50-year-old oil and gas industry, developing these gas reserves at full scale financial terms – although that will amount Oman has a highly-skilled workforce in the would represent an opportunity to underpin to $750 million in this appraisal phase sector. BP is benefiting from this talent, as its energy supply for years to come. alone – but in terms of people and talent to run the business in the years ahead. What started with a handful of expatriate staff based in a Muscat hotel room has already transformed into an organisation of around 100 people, 60% of whom are Omani nationals. That headcount will potentially increase to around 700 by 2016; it is a figure that represents a huge recruitment challenge, one that will need to be met predominantly by the local population. With that in mind, BP is turning to the graduate market in Oman, to attract university-leavers into its Challenge training programme. “We hired our first four Omani Challengers in 2010, in drilling and engineering disciplines, and we’re

36 Issue 1 2011 BP MAGAZINE Gas development> Oman

> EXHIBITION> BRITISH MUSEUM, LONDON TREASURES OF OMAN

Silver jewellery and traditional costumes from Oman’s diverse regions hold greater significance than mere aesthetic appeal, a new exhibition at London’s British Museum reveals. To mark the 40th anniversary of the accession of Sultan Qaboos bin Said, BP approached the museum with the idea to create the display, with support from Oman’s Ministry of Tourism. The resulting exhibit features items of personal adornment that offer insight into the country’s rich history. From a set of 10 finger rings, worn together on special occasions, to ceremonial weaponry, the artefacts highlight the country’s varied metalworking traditions from the past century. Some of these are increasingly rare; for example, the modern preference for gold has resulted in a steady decline in demand for the silversmith’s skills. The display includes intricately decorated bracelets, head ornaments and earrings. It is complemented by brightly-coloured, traditional outfits that have been donated by the Ministry of Tourism. Among them is a woman’s shimmering, indigo-dyed cotton abuthail (dress) from the southern Governorate of Dhofar. The use of indigo is another vanishing custom, particularly in urban centres, as the blue stains that transfer to the wearer’s skin or hair are no longer considered desirable, despite the belief that indigo has talismanic properties. Fahmida Suleman, the display’s curator, says, “Omani jewellery and costume is not only ornamental, but is considered to have protective functions. We didn’t want to show these objects simply as works of art, but bring them together to display them as a living culture with different purposes. “Adornment acts as a means of identification, too; for example, a pair of chunky anklets would be worn by women from the north, or the interior. Oman is a mosaic of different ethnicities and cultures, each with their own tradition of costume and jewellery.” The exhibited objects also reflect Oman’s historical trade links with the wider world. Necklaces dating from the 1950s are adorned with imported coins, such as Indian rupees or Austrian thalers, from previous centuries. Scientists at the British Museum are using X-ray technology to analyse the metalwork to produce further research on the techniques of craftsmanship. ■

» Adornment and identity: jewellery and costume from Oman is on display at the British Museum until 11 September.

BP MAGAZINE Issue 1 2011 37 ➔ science made simple Report> Amanda Breen Illustration> Magic Torch

their location can avoid sensitive areas, thanks to the ability to reach reservoirs that are not located directly beneath a rig. On the level Subsurface and drilling teams need to consider a number of factors when While vertical wells remain at the deciding whether a horizontal well is appropriate for a reservoir. First and heart of the oil and gas business, foremost is the geology; in a very hard, deep rock formation, the length of time it increasingly, the industry is turning takes to drill horizontally may make it counter-productive, when a number of to horizontal drilling in order to vertical wells could be completed in the extract more unconventional sources same timeframe. Producers, therefore, need to weigh up the time and cost of of hydrocarbons in a more developing a horizontal well, versus the improved productivity it will yield. environmentally sensitive manner. To help plan for fracture stimulation in horizontal sections, geologists analyse data carefully to determine the stress lines in hink drilling for oil and gas, so-called ‘pay zone’ typically around the rock, where drilling will also proceed and the first image that 30 metres (100 feet) wide, whereas a with greater momentum and speed. Once comes to mind is usually one horizontal well may run through, say, the operation is underway, measurement T of carving out a long, straight 900 metres (3,000 feet) of that same zone. while drilling (MWD) systems measure vertical section through the Accordingly, production rates may increase downhole and formation conditions, Earth’s surface to reach the fossil fuels that by orders of magnitude. relaying precise, real-time information lie buried deep below. Such conventional, In accessing hydrocarbons such as back to the surface, to allow safer, more upright wells are obviously a mainstay of ‘unconventional’ gas – difficult to extract accurate drilling. the industry, but the technique of as it lies in reservoirs with low In deep reservoirs, such as those that BP horizontal drilling is commonplace, too. permeability – the technique of horizontal is dealing with in Oman’s Block 61, In fact, statistics show that, in the US, drilling comes into its own, since it high temperatures (above 150°C the number of rotary rigs drilling generates higher production rates and makes horizontal holes in February 2011 was extraction more economically viable. almost double that of those working on the Horizontal drilling has its environmental vertical equivalent. So, why does the benefits, too; not only are fewer wells industry turn to horizontal drilling? required on the surface, but The main advantage of a horizontal well is that it allows producers to make contact with more of the reservoir, so more resources can be recovered from a single well. A vertical borehole is drilled first, then ‘kicked off’ at around a 90-degree angle, through the subsurface formation. On its own, a vertical well may only access a vertical slice of the

Horizontal stats

Rotary rig count in United States (11 February 2011) Directional 225 Horizontal 980 (up 48.94% from 2010) Vertical 516 (up 12.42%) http://www.energydigger.com/rig-counts/u.s.-rig-counts.aspx

38 Issue 1 2011 BP MAGAZINE or 300°F) can provide a challenge, as they decades. In North America, drilling may cause the deterioration of downhole horizontal wells has become routine equipment, particularly the electronic practice to access unconventional gas components of the MWD tools. However, resources. Last year, BP’s North America this aspect can be managed by circulating Gas business drilled 63 horizontals in four fluids around the drill assembly to keep the different fields, with the horizontal wellbore cooler. sections taking anywhere from five to 30 Hole-cleaning becomes more difficult in days to complete, at average depths of horizontal wellbores. In a vertical scenario, 4,570 metres (15,000 feet). Deeper still, at mud is pumped down the drill pipe to around 5,200 metres (17,000 feet), BP Oman circulate the cuttings up and out of the completed its first horizontal well in Block well – any that are not swept out 61 last December, drilling out to 750 metres immediately, fall back into the flow of the (2,460 feet). ascending fluid. That process is not so As drilling techniques and equipment straightforward in a horizontal alignment, continue to evolve, horizontal wells are but techniques such as rotating the pipe likely to reach farther than ever before, and while drilling and optimising the flow rate in doing so, unlock the planet’s more of mud can help. challenging hydrocarbon reservoirs that BP has developed its expertise in will help meet future energy demand. ■ horizontal drilling over the past two

Glossary Cuttings: small fragments of rock cut by the drill bit and brought to the surface by the flow of drilling mud. Hole-cleaning: the process of clearing solids from the wellbore, during drilling. Kick-off point: the depth in a vertical hole at which a horizontal hole is started. Pay zone: a productive area in a formation, which is sufficiently thick and contains a high enough concentration of oil or gas to make production commercially viable.

BP MAGAZINE Issue 1 2011 39 ➔ international operations Business report> China

Report> Jaclyn Clarabut Photography> Simon Kreitem

CHINATHE FUEL FOR GROWTH To some, the phrase when East meets West depicts what happens when two cultures collide. For BP and China, there is no such clash, rather a 30-year history of teaming up to share common interests in areas such as safety, sustainable growth and solving the energy needs of the future.

Recipe for success: lubricants mixed specially for the Chinese market at the Castrol technology centre.

40 Issue 1 2011 BP MAGAZINE BP MAGAZINE Issue 1 2011 41 145 RUSSIA

KAZAKHSTAN

MONGOLIA Harbin 40 KYRGYZSTAN Urumqi Dalian NORTH KOREA JAPAN TAJIKISTAN BEIJING PAKISTAN SOUTH KOREA

Nanjing CHINA Xi’an Shanghai PHILIPPINE SEA

NEPAL Chongqing BHUTAN Guangzhou 20 INDIA AREA ENLARGED TAIWAN MYANMAR BANGLADESH VIETNAM Zhuhai LAOS THAILAND km 500 1,000 85 PHILIPPINES

iming Chen’s life changed best safety measures at SECCO (see page 44), Corporation (CNOOC) to explore for and the day he learned he had BP’s petrochemical joint venture with state produce gas from the South China Sea, as passed the national oil company Sinopec, is proof of this belief. the country attempts to reduce its heavy university entrance BP has also shared its experience of dependence on coal, which now makes up exams, when his results responding to the Gulf of Mexico oil spill, 70% of its energy mix. As China cleans up were announced over his and the lessons it has learned, with state oil its skies and polluted cities, cleaner fuels village’s loud speaker companies such as Sinopec. such as gas are experiencing strong growth. system. Born in poverty BP has a long history with China, and is “BP could be a strong supporter of the on a farm in the middle of the Junger basin partnering the country in some major Chinese desire for transformation from L– an area surrounded by mountains in the areas. It is working with Chinese today’s energy and pollution-intensive far northwest of China – Liming’s companies on building safer operations; pattern of growth, to a cleaner and more schoolwork consisted more of cotton teaming up with Chinese companies sustainable future,” says Xavier Chen, BP’s picking than multiplication tables. Today, looking for global expansion; and helping vice president of policy and integration he heads up BP’s $4.7 billion business China find ways to meet its growing energy in China. investment in China. needs, which includes developing Liming agrees. “China knows it can’t “I always say to young people ‘if you alternative forms of energy. repeat the model that industrialised believe that you can learn only what they It is also supporting the country’s growth countries have gone through, with high teach you in school, then I should be a – in February 2011, BP’s petrochemical plant energy consumption and environmental farmer today,’” he says. at Zhuhai announced plans for a hike in damage. The central government has Liming and millions like him have production of purified terephthalic acid implemented tough measures that include raised themselves out of poverty, as China (PTA) to 1.7 million tonnes a year, making it reducing the energy intensity of gross has transformed. With double-digit growth one of the largest PTA plants in the world. domestic product by 20% in just five years. » over the past 30 years, it is now the world’s And BP is playing a supporting role as second largest economy, and its car market China increases its presence on the outstrips the US, with 18 million vehicles international stage, partnering Chinese sold last year, compared to 11 million sold companies to access new resources. In fact, in the US. these partnerships are proving successful But as China looks to a future that many in Angola, Indonesia and Iraq. Liming says, predict will see it replace the US as the “Iraq is a big deal that combines BP and world’s largest economy, Liming doesn’t CNPC capabilities and strength together.” forget the lessons of the past. These joint projects are important as “The harsh environment taught me the China looks to increase its energy security. Vital statistics: important lesson of teamwork,” he says. It BP’s Energy Outlook 2030 projects China’s oil Name: China is a sentiment that pervades BP’s work in consumption will grow by 8 million barrels Total area: 9,596,961 square kilometres China. “Our focus is not just on BP’s needs, of oil a day (mb/d), to reach 17.5 mb/d by Population: 1,336,718,015 but on China’s needs and finding 2030, overtaking the US as the world’s largest Life expectancy: 74.68 years overlapping interests and room for oil consumer. “I believe multinational Capital city: Beijing Climate: extremely diverse; tropical in south co-operation.” companies like BP can play an important to subarctic in north “You have to be willing to learn, but you role in China’s energy security,” Liming says. Religion: Daoist (Taoist), Buddhist, Christian also have to be humble enough to learn from To this end, BP has joined in alliance 3%-4%, Muslim 1%-2% others,” he adds. The work to implement the with the China National Offshore Oil

42 Issue 1 2011 BP MAGAZINE Business report> China

Night and day: Shanghai’s famous strolling spot, The Bund, by night (above) and a new dawn in making fuels of the future at the Dalian Institute of Chemical Physics.

BP MAGAZINE Issue 1 2011 43 MAKING PROCESS SAFETY PERSONAL Report> Lou Craig

ith its mass of grey steel set weren’t going to accept that just because it was against an imposing China it wasn’t going to be done this way.” skyline, SECCO is a giant of Changing mindsets is often challenging, but a petrochemical plant. The it was the appeal to people’s values that made figuresW speak for themselves: it is BP’s single the difference. “Bringing home money and a largest investment in China, producing smiling face to the family means everything,” 3.5 million tonnes of petrochemicals – says Xiaoping Yang, SECCO’s director of HSSE essential ingredients in resins, fibres, plastics and quality, “and that’s how people’s and synthetics. It employs up to 10,000 understanding shifted. It wasn’t about being people, at peak maintenance, and straddles safe because they had to – they wanted to.” 200 hectares (500 acres) – large enough to One example of this shift is the way in house around 200 full-size football pitches. which product is moved safely to customers in It is also home to one of the world’s largest China, whether by road, rail, ship or pipeline. olefins crackers – the equipment necessary “Road transport, especially, is a daily risk,” to turn longer chain hydrocarbons into says Hee Teik Tan, SECCO’s commercial smaller olefins, such as ethylene. director. “So, we’ve trained the trainers to do But away from the formidable exterior, in-cabin observation and pick up basic issues, inside the main building is where this such as putting on seat belts and obeying the behemoth takes on a distinctly personal feel, speed limit. They’ve taken real ownership of with a brightly coloured display of posters the issues, which means we can meet plastered across the walls. One shows a customers’ orders and get our people home SECCO employee and her child playing ball, safely, too. There’s no magic formula. It’s a with text that talks about her love for her matter of engaging people to show them the daughter and the importance of family. Far merits of getting it right safety-wise.” from decoration, these posters have proved a That engagement extends to treating key step in creating an unrivalled safety contractors as partners and equals, with training record in China and helped SECCO achieve for thousands of rural migrant workers, the something remarkable – 88.6 million hours implementation of personal and process safety worked without a single fatality or major procedures, auditing and inspection, and sharing process safety incident. This record earned knowledge with the contractors’ leadership. SECCO the main accolade in 2010 in BP’s The link between personal and process internal recognition programme, which safety is an important one, and the SECCO attracts more than 1,000 entries every year. leadership has deliberately tried to pay more Working to embrace the very best BP and attention to process safety, because a failure Sinopec standards, SECCO has built a unique there, however small, could lead to personal safety culture, one that leadership and safety issues at scale. And that’s where an employees alike have embraced. At its heart emphasis on safety pays off. lies a programme called ‘incident and injury As a consequence, SECCO has helped build free’ (IIF) – dubbed locally ‘we care’ – that seeks BP’s credibility as a partner for the future. to make safety personal to every employee. SECCO is now considered a ‘force for good’ by BP’s Mark Wilson oversaw the programme. local communities and government agencies He says, “It was hard work, but we changed – and by BP. people’s thinking from ‘I’ll work safely Presenting SECCO with the internal ‘BP at its because I have to’, to ‘I want to work safely Best’ award in 2010, group chief executive Bob because it’s good for me and it means I can go Dudley described the team as the one that “best home to my family.’” represents everything that BP wants to be – Formed in 2001, SECCO is BP’s $2.7-billion living out all of our values in a very clear way.” 50:50 joint venture with Sinopec and its For the SECCO team, the recognition comes subsidiary, the Shanghai Petroleum Company. at a point in their safety journey when they From the beginning, the idea was to set the have good reason to reflect on their success. standard in safety practices, in a country that “We’ve been on this journey for so long,” has seen more than 1 million industrial says Wilson. Does he feel the pressure to fatalities in the previous nine years. maintain the safety record? “No,” he says. “The “We wanted to bring the best international pressure comes from wanting the people who BP safety standards to this project,” says Jeanne work here to go home safely – I don’t need any Johns, who sat on the SECCO board. “We more pressure than that.”

44 Issue 1 2011 BP MAGAZINE Business report> China

Inside out: cycling is the way most workers get around the 200-hectare SECCO site (above). In the control room, monitors help staff keep a close eye on the safety of the site.

“There’s no magic formula. It’s a matter of engaging people to show them the merits of getting it right safety-wise.” Hee Teik Tan

BP MAGAZINE Issue 1 2011 45 Business report> China

» These targets provide an opportunity for For car manufacturers, the challenge is He adds: “Having a technology centre BP to work with car manufacturers to to meet new standards on vehicle here means we can get in on the ground improve efficiency and lower emissions, emissions and curb fuel consumption, by and help the manufacturers meet new when the desire to own a vehicle is a key designing greater engine efficiency. complex emission standards and work with aspiration for the new Chinese middle class. Another challenge exists – to build engines them as their business grows.” One example of that desire is the appropriate for the local environment, According to Zhi Min Liu, technology popularity of the first-ever live television where traffic congestion means the engine manager at the Castrol centre, the draw for a licence plate. Thousands of and its lubricants must work harder. challenge for the car manufacturers is to Beijingers watched and waited, hopeful that This is where BP’s lubricants brand, build a smaller but more powerful engine. their number would come up. But the odds Castrol, is playing a role, partnering with the As the concentration becomes smaller, so were stacked against them, with a one in 10 local car makers. In Europe, the company does the necessity for thinner oil to flow chance of winning. Figures suggest 200,000 already works with manufacturers such as through the engine, while still cooling and people had applied online that month for BMW and Ford to co-engineer lubricants protecting the engine against wear and the chance to ‘win’ one of only 20,000 new that work together with the new engines to keeping it clean. “We’re designing tailor- plates that would allow them to take to improve fuel efficiency. made products rather than general ones. roads so congested that they sometimes Castrol is a relative newcomer in the The oil is treated as a key part rather than a resemble a car park rather than a highway. Chinese market, having only been in the general part,” he says. Designed by the Beijing city country for 16 years. It was the first While the centre seeks to formulate government to ease congestion, the lottery- international lubricants manufacturer, lubricants that will work with the fuels of style system began in January 2011, with a however, to set up a technology centre today, across the country, BP is also looking new batch of plates released each month. in China. to find the fuels of the future. The plan is to limit the number of new cars The centre is not only designed to Sitting on the northeast tip of China, to 200,000 a year. provide deep expertise in the development 500 kilometres (310 miles) from Beijing, is With the number of cars on the capital’s of lubricants, with state-of-the-art analysis, the port city of Dalian, home to cutting- roads almost doubling in five years, to blend science and friction-testing edge laboratories that could hold the key to 4.76 million, the gridlock has become the laboratories onsite, but also as a place to the country’s energy outlook. stuff of legend. In Shanghai, where BP’s work closely with car manufacturers. The Dalian Institute of Chemical lubricants team has built a technology “Chinese manufacturers want to work Physics (DICP) exists to develop hi-tech centre, the locals ask visiting Beijingers, with people to improve their technology, technologies in the fields of chemistry and “Is the traffic really that bad?” and if they see a local option to work with catalysis, that could benefit the sustainable Curbs on new vehicles are already in an international brand, that’s an attractive development of China. It houses the place in Shanghai, revealing just one proposition,” says Paul Turner, China and Dalian National Laboratory for Clean example of some environmental brakes North Asia sales director for Castrol. “For Energy, which targets efforts to build being applied to the more unsustainable us, it’s not about flying in and saying I’ll see renewable and energy-efficient parts of China’s economic boom. Complex you in six months time. Instead, we can technologies. emission standards exist, too, to clean up now have a weekly conversation and really On campus, there is an enthusiasm for the air in the cities. work on a project together.” technology, with students keen to exhibit

Transport options: Beijing’s roads can “I believe multinational companies often resemble a car park (above, left). Above, pedestrians and roller skaters like BP can play an important role in get away from the traffic. China’s energy security.” Liming Chen

46 Issue 1 2011 BP MAGAZINE advances in chemistry, catalysis and working at the boundaries. Here in Dalian, “BP has been very good membrane technology, or use the latest kit we are working at the boundaries of a large at helping with our to see right into the heart of chemical multinational company and a leading processes in real time. research institute, the boundaries of East intellectual property, BP has supported this approach over the and West and of fundamental and applied managing patents past 10 years, working with the institute in research – it is hugely exciting.” these fields. And the partnership is not a And the relationship is mutually internationally and distant one, with BP offices located on beneficial, with give and take on both bringing patent experts campus. As the close relationship has sides. “This is a place where ideas can be grown, so has the confidence that the tested quickly, reliably and at relatively here, so that our partnership can yield cost-effective low cost, with the aim of turning great technology can have a techniques for making fuels and chemicals ideas into new global technologies,” through converting coal or biomass. Searle says. more global reach.” “I believe the work we’re doing here Professor Bao says, “BP has been very Professor Bao could form the basis for the energy good at helping with our intellectual technologies of the future, maybe in clean property, managing patents coal or biomass conversion technology,” internationally and bringing patent says Professor Bao, who has worked with BP experts here, so that our technology can for a decade, and was recently elected one have a more global reach.” of the youngest of the 709 academicians of Professor Li Wen Zhao was one of the the esteemed Chinese Academy of Sciences initiators of the DICP and BP relationship, (CAS). Academicians aren’t rare at DICP – and is proud of how it has grown. He agrees of the 124 chemistry members of CAS, that BP has helped the institute to see Dalian is home to 12 of them. opportunities outside of the lab. “BP has the For now, the success of the partnership experience in the industrialisation of a is the partnership itself, according to Greg process. We have many new ideas, but Searle. As BP’s research manager, based at which ideas could be converted to DICP, Searle is proud of the capability that industrial use? This is where BP has a both partners bring. DICP is stocked with strong team and much experience to talent, with 750 Master and PhD chemistry help us,” he says. students on campus. So when can we see a new process Searle says, “What you’ve got here is a developed at DICP with BP that’s ready to world-leading research capability, with be industrialised for use in China? Searle more post-graduate chemistry students and says: “Technology development needs time talent than anywhere else in the world.” and patience, but we really believe He adds, “I believe key technical the current portfolio has the potential to breakthroughs happen when you’re deliver in the next few years.” ■

New direction: cutting-edge equipment at the Dalian Institute of Chemical Physics that allows researchers to watch catalytic processes in action.

BP MAGAZINE Issue 1 2011 47 Viewpoint> Signing ceremony

Historic partnership British Chancellor of the Exchequer George Osborne (far right) talks to the press pool at Number 11, Downing Street, following a meeting with BP chief executive Bob Dudley (far left), BP chairman Carl- Henric Svanberg and Reliance Industries Limited managing director Mukesh Ambani. BP and Reliance had just signed an agreement to create a partnership that will see BP take a 30% stake in 23 oil and gas production sharing contracts in India. The two companies will also form a 50:50 joint venture to source and market gas in the country. The partnership will combine BP’s deepwater exploration and development expertise with Reliance’s skills in project management and operations. The 23 contracts will continue to be operated by the Indian company. The transaction constitutes one of the largest foreign direct investments into India. “This partnership meets BP’s strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets,” said Svanberg. In the background is a portrait of the late British prime minister David Lloyd George, by Sir William Orpen. Look out for a full report on the deal later this year. ■

REPORT: LISA DAVISON

48 Issue 1 2011 BP MAGAZINE PHOTOGRAPHY: STUART CONWAY

BP MAGAZINE Issue 1 2011 49 ➔ biofuels Business acquisition> Verenium

Delicate work: a BP scientist performs micro-tube reactions at the biofuels global technology centre, San Diego.

EXPERTS IN THEIR FIELD BP’s acquisition of Verenium’s cellulosic biofuels business demonstrates the company’s commitment to this alternative fuel. But, it’s not just about laboratories and cutting-edge technology. Sometimes, it’s the people and their know-how that are the greatest assets.

REPORT> PAULA KOLMAR PHOTOGRAPHY> JOSHUA DRAKE & FRANK HOM

50 Issue 1 2011 BP MAGAZINE BP MAGAZINE Issue 1 2011 51 Business acquisition> Verenium

e all sat in the home to its demonstration plant, where the underwent major upgrades to make it conference new biofuel samples are run in large-scale operational for the first time and “ room – every quantities. In Florida, BP is growing and investment in the operational side of BP’s Verenium improving high-yielding energy cane US biofuels processing capacity will employee – as (much like sugarcane, but not usable as a continue for years to come. we have done, food product) and has begun growing more Philip New, head of BP Biofuels, knew regularly, for company meetings and major acreage in East Texas. early on that giving the new employees announcements.W But that day, we did not BP is now a big player in the global ownership of how the global technology know that we were waiting to find out biofuels industry: the key is talented people, centre and Jennings demonstration plant which of us would become BP employees and their collective knowledge about how operated was central to success. “We and which were to stay with Verenium,” biofuels work and, more importantly, how discussed BP’s values in depth, agreed says Gordana Djordjevic, senior scientist in to make them work more efficiently. specific milestones for production, and the biofuels industry, and a recent addition It’s challenging to integrate a group of listened for the things in Verenium’s ways to BP’s biofuels business. “Verenium experienced people from a small company of working that BP Biofuels should learn employees left the room; the rest of us into a major corporation, but, fortunately, from, and reinforce in the future. It is started a new future in BP.” everyone is motivated to meet an aggressive having a major impact, and I am excited by Purchasing a company’s assets doesn’t performance schedule, safely and how positive everyone is about the change. always just involve land, structures, rights successfully. Our aim is to be one team – where you can’t and market share. Sometimes, it is “The scientific biotechnology talent that see the join – I think we’re getting there.” experience and expertise that are the now defines the BP biofuels group is Building trust has been critical in getting primary assets. When it bought a large part substantial,” says Ken Jefferd, integration the teams onboard. “People are seeing the of the biotech company Verenium in manager. “With this huge talent pool in San resources behind the work we are expected September 2010, BP Biofuels’s global staff Diego, and the operational demonstration to do, and are realising that if goals are met almost trebled: scientists, researchers, plant and its staff of 75 in Jennings, BP is and technology packages delivered, BP will engineers, operators and project managers launching our biofuels business onto a make biofuels a market reality in its with advanced skills in developing biofuels whole new level. During the transition portfolio of products,” says Nelson Barton, joined the company, bringing with them period, our task has been to provide the one of the key people joining BP as global cutting-edge technology, laboratories and resource support to enable focus on safety head of research and development. an advanced demonstration plant. and business performance, as we “For scientists and researchers, seeing Verenium’s technology centre in San simultaneously integrate Verenium into BP, research converted into a saleable product Diego, California, is replete with research allowing the new biofuels team to grow and is a powerful motivation to push the laboratories set up for designing and testing deliver more than they ever have before.” boundaries. During and after the biofuel components. Jennings, Louisiana, is In tandem, the Jennings facility acquisition process, BP communicated and

52 Issue 1 2011 BP MAGAZINE “For scientists and followed through with pledges to work future of biofuels and planned to be a major together, listen and fulfill investment part of it.” researchers, seeing agreements. Trust has been earned from Visibly encouraged by the smooth research converted both directions.” transition and enthusiastic new biofuels Carey Buckles, manager of the Jennings staff, Chicago-based Ellerbusch says, “We into a saleable facility, recognised the positive impact of have a lot to accomplish over the next few product is a powerful the acquisition immediately. “Resources months and it will be challenging. With the motivation to push have been critical to getting the plant to an uplifting attitude of the creative biofuels operational level. Our demonstration plant experts now among us, I have confidence the boundaries.” is vital for generating data for large-scale that we can and will succeed, while keeping Nelson Barton assessment.” The technology centre BP values embedded.” develops the biotechnology and tests it in “It was difficult to separate from small quantities. Verenium colleagues, and somewhat “Our value as the processing link is in disquieting to move into a corporate revealing what works and what doesn’t. structure,” says Djordjevic. “The fact of the Only after that information is logged can matter is, with BP, we can look forward to the San Diego group refine the an exciting, innovative future growing the biotechnology with confidence,” says biofuels business: we can seriously explore Buckles. “As part of the BP biofuels group, ideas and follow through at scale to create we are up and running at demonstration value; our research will be put to use.” As scale, directly as a result of the investment the senior biofuels scientist, Djordjevic is and leadership support of BP.” looking past tomorrow and on to making Sue Ellerbusch is already seeing the real progress in biofuels, so that it becomes results. As manager of BP Biofuels in North a viable, everyday fuel. “To see our work America, she has been involved with become a reality motivates us even further Verenium since the start, including with the to make inroads to practical biofuels.” BP joint venture that preceded the When asked what is pivotal in the

Core components: researchers and a acquisition. “In a matter of weeks, after the integration and motivation of the global technician at work in the biofuels companies announced that BP would technology group, New and Jefferd agree: technology centre and demonstration acquire the biofuels segment of Verenium, clear, truthful communication and respectful plant (far left and middle). Below, by the people transferring to BP clearly started dialogue. According to Jefferd, “With it, BP tapping into the energy locked in energy cane, biofuels can reduce the to see themselves as BP employees. They will carve out a successful place in the dependence on petroleum. recognised that we were serious about the biofuels industry. Without it, we would fail.”

BP MAGAZINE Issue 1 2011 53 “We’re determined to do biofuels exceptionally well – using very efficient feedstocks grown and processed sustainably, and developing advanced technologies with the potential to make good biofuels even better.” Philip New

New growth: a farmer and energy cane supplier inspects his next crop.

54 Issue 1 2011 BP MAGAZINE Business acquisition> Verenium

NEW DEAL TO ACCELERATE BIOFUELS DELIVERY

Turning grass into fuel is a simple way of putting it, but that’s What the Verenium deal precisely what BP is doing with its new US-based biofuels means for BP: businesses. With the purchase of Verenium’s specialist business, ● Purpose-built bioscience R&D BP has taken a major position in cellulosic biofuels – fuels that facilities in San Diego, California. are produced from non-edible grasses or woody crops, as opposed ● Intellectual property related to to the corn and wheat that provide most of today’s ethanol. proprietary cellulosic biofuels R&D “The acquisition demonstrates BP’s intent to be a leader in the and conversion technology. cellulosic biofuels business in the US, and positions us as one of ● 1.4 million-gallon-per-year the few global companies with an integrated end-to-end demonstration facility in Jennings, capability, from research and development through Louisiana. commercialisation to distribution and blending,” says Philip ● Sole ownership of Galaxy Biofuels New, chief executive of BP Biofuels. LLC, which holds the parties’ jointly “Our early partnership with Verenium has been fruitful, developed intellectual property. enabling the companies to develop a leading cellulosic ethanol ● Sole ownership of Vercipia Biofuels, technology package, driven forward by the skills and expertise of which is commercialising people from both companies. By acquiring Verenium’s cellulosic proprietary technology for biofuels technologies, BP Biofuels should be well placed to cellulosic ethanol production. accelerate the delivery of low-cost, low-carbon, sustainable biofuels, at scale.” World leaders are pressing scientists and businesses worldwide to develop biofuel technologies and products that will relieve dependence on non-renewable fossil fuels, and meet the growing demand for cleaner fuel. By tapping into the energy locked in energy cane, biofuels can reduce the dependence on petroleum, while successfully lowering carbon emissions. If produced well, they can also stimulate agriculture in marginal areas and produce far fewer greenhouse gas emissions than conventional gasoline. According to New, “We’re determined to do biofuels exceptionally well – using very efficient feedstocks grown and processed sustainably, and developing advanced technologies with the potential to make good biofuels even better.” The US appetite and market for supporting biofuels is strong; it is the major consumer of fossil fuels globally and the Energy Independence and Security Act has spurred efforts to change the mix with commercially available alternatives. BP has taken up the challenge and its $98 million Verenium acquisitions are proof of that commitment. Since 2006, BP has announced investments of more than $1.5 billion in biofuels research, development and operations, and has announced investments in production facilities in Europe, Brazil and the US. This includes partnerships with other companies to develop the technologies, feedstocks and processes required to produce advanced biofuels, and $500 million over 10 years in the Energy Biosciences Institute (EBI), at which biotechnologists are investigating applications of biotechnology to energy. With Verenium, BP believes it has access to a technology that can deliver commercially viable ethanol, at scale, and turn grass into fuel in a sustainable way, for the first time in the world. Cellulosic materials are found in the stems, stalks, and leaves of plants, as well as the trunks and branches of trees, and in agricultural wastes. Cellulosic materials are abundant worldwide – making up most of terrestrial biomass by weight. The fact that they are not needed for food or animal feed – unlike other biofuel feedstocks – explains why they have attracted so much scientific, political and commercial interest. ■

BP MAGAZINE Issue 1 2011 55 ➔ careers Talent development> Ultimate Field Trip 2010 THE

Talented team: geology students Chris Hunter, Lizzie Riley and Ben Said spent six weeks working with BP in 2010. The trio are pictured here in one of BP’s highly immersive visualisation environments (HIVE) in Sunbury, UK. HIVEs feature a series of three- dimensional computer screens around which teams can gather to study data and images.

56 Issue 1 2011 BP MAGAZINE Report> Jaclyn Clarabut Photography> Stuart Conway & Graham Trott ULTIMATE TEAM The prize was the field trip of a lifetime, and for the three students who won the inaugural Ultimate Field Trip competition, the coveted summer internship with BP certainly lived up to its name.

BP MAGAZINE Issue 1 2011 57 A group of young people stand on stage in front of a live Ultimate Field Trip 2011 This year’s entrants were asked to form a audience ready to take tough questions from a panel of team of three and submit innovative, experts. This is not the latest television talent show, but scientific ideas for maintaining the UK continental shelf as a global centre of the grand final of the Ultimate Field Trip competition, marine technology and engineering where the brightest UK students pitch their ideas to a BP excellence, by extending the useful life of North Sea oil and gas infrastructure – and jury, who will decide which team will win a summer potentially, the oil and gas fields – as their internship with the company. economically productive activity comes to an end. The final is scheduled for April 2011. See www.bp.com/fieldtrip for The six-week internship gives the winners Although the competition is aimed at more information. access to the full range of BP’s North Sea STEM undergraduates, that didn’t stop the operations, including a stay on an offshore second-year geology students from platform, a trip to Norway and access to BP Imperial College, London, entering. They mentors. But the internship is no were attracted by the chance to contribute sightseeing holiday. The students must to solving climate change – a topic familiar help BP address real-world problems on a to today’s undergraduates, who have grown project that gives them the chance to put up at the same time as climate change their own ideas into practice. concerns have developed. The competition is now in its second Fifty-two entries from teams of three year, and for BP, it exists to attract the best were eventually narrowed down to five sets science, technology, engineering and of hopefuls. At a grand final held at mathematics (STEM) students, and to London’s Natural History Museum in April give them an insight into the exciting 2010, Meltdown impressed the judging careers and opportunities offered by the panel of senior BP executives with their energy industry. answer to the question: what innovative, The battle for places has been fierce, scientific ideas can your team come up with interest from hundreds of students with to address the carbon dioxide (CO2) across the UK. Such was the standard of the emitted from a typical power station, students who made it to the 2010 final, that using natural gas from the North Sea to all 15 were guaranteed a first interview generate electricity? with the company after graduation. But, Inspired by their studies of the Ice Age, there could only be one team that Meltdown fought off stiff competition – ultimately won the trip and that prize went and a tough BP panel – with their winning to Team Meltdown. proposal for cutting carbon emissions by “We thought everyone would be better using photosynthetic single cell micro- than us. But we put in a lot of hard work, organisms, such as algae and bacteria. and it really paid off.” So says Chris Hunter, Crowned champions by BBC Radio 4 who alongside Lizzy Riley and Ben Said news presenter John Humphrys, the team made up the members of Team Meltdown. joined BP during their summer break. One »

58 Issue 1 2011 BP MAGAZINE Talent development> Ultimate Field Trip 2010

Tough competition: five teams eventually battled it out for the internship at last year’s grand final (opposite), presenting their ideas to a BP jury. Above, Ben Said says his perception of the North Sea industry has changed BP MAGAZINE Issue 1 2011 59 as a result of his time at BP. of their first tasks was to complete their basic offshore safety induction and emergency training, which includes helicopter submersion instruction – a key safety skill for anyone travelling offshore to an oil and gas installation – to teach helicopter passengers a safe escape route should the aircraft have to ditch at sea. For all three students, the experience was worth it for the chance to go offshore to BP’s ETAP platform. With its nine different reservoirs, BP’s Eastern Trough Area Project (ETAP) is one of the largest North Sea oil and gas projects of the past 20 years. Chris says, “Making our descent in the helicopter and then landing on the platform was amazing.” Ben adds, “Looking down through the floor and seeing the ocean beneath your feet, that’s a really impressive experience. We were there for a week, but we really wanted to stay longer.” Team Meltdown was there to assess the technical feasibility of adding a new technology to ETAP. Developed by California company Alphabet Energy, the technology is a waste heat recovery unit that can generate electricity from waste heat. The brief was to look at whether it was feasible to retrofit this technology to the power turbine exhaust system on ETAP. The trio had to verify both the operating and design conditions across various utility systems; perform a mass and energy balance, ensure that the design incorporates human technology would make the multi-million in addition to verifying the economic factors and is inherently safe.” dollar investment worthwhile in Norway. feasibility of each design. The research group tasked with studying Taking a well-earned break, the group BP’s Geoff Noble mentored the students, the economic feasibility of the project also hiked to Pulpit Rock, a massive 604-metre- who, he says, impressed him by whole- took Meltdown to Norway. Here, they (1,982 feet) high cliff above Lysefjorden. heartedly tackling process engineering, travelled to Stavanger, home to part of BP’s “This was definitely one of the highlights,” despite having geosciences backgrounds, North Sea business, to assess whether the says Lizzie. “Credit to them for getting stuck in. They amount of carbon tax saved by the At the end of the study, the team had the confidence to find the right people presented their findings to BP’s North Sea on the platform, and that’s what we’re executive team. As the technology was still looking for: people who have the unproven, the students advised that it was confidence to do that.” more prudent to await the results of Process engineer Raj Misra also played a industrial trials prior to installing the role in guiding the team. He says, equipment in a harsh offshore environment. “Determining whether a retrofit of this Graham Howes, BP’s Alternative Energy magnitude is feasible is not always best adviser, attended the presentation with achieved by pouring over heaps of design interest. “I was impressed with the work documentation in the office. In the they did, but I was disappointed with the appraise project phase, it is invaluable to results. But, now we have that information, survey the proposed offshore location we have a starting point and a lot of insight identified for the modifications and discuss into how we could make it work. The team the project directives with the relevant was looking at an early-stage technology platform-based operations personnel. that we think has a place in the future and While on the platform, an engineer can could be significant for BP,” he says. appreciate the equipment layout in The students from Meltdown could also accordance with the design drawings. have a place in BP’s future, as all three have Discussions with both onshore- and accepted further internships with the offshore-based personnel will help to company. ■

60 Issue 1 2011 BP MAGAZINE Talent development> QUICK FIRE Q&A WITH THE WINNERS Ultimate Field Trip 2010

Lizzie What did you learn about working in the oil industry? You have the opportunity to do whatever you want; you’re not restricted. And most roles are inter-related. What did you learn about yourself? I want to change my career path and go into environmental science.

Ben What was your highlight? The final presentation of our project – that was a nice, satisfying feeling, particularly having someone say it taught them something. What did you learn about working in the oil industry? I think the general perception is that the North Sea is a dying industry, but that’s not the case! The technology we looked at (as part of the final project) showed that.

Chris What did you learn about working in the oil industry? It’s a lot more complex, with lots of different career options, and it’s an industry I’d definitely like to get involved in. Any advice for this year’s entrants? Anyone can enter it, we were geologists and we won. It wasn’t because we were smarter, but we tried really hard. We had the most amazing summer. If we hadn’t won, I would’ve spent the summer doing 12-hour shifts on minimum pay – or sleeping!

Bright futures: Lizzie (facing page), Chris (above) and Ben have all accepted further internships with BP. Opposite, BBC Radio 4 news presenter John Humphrys hosted the BP MAGAZINE Issue 1 2011 61 2010 grand final. PARTING SHOT Photography> BP Archive

Action stations They were the Randy Fletchers and Brad Byczynskis (see page 27) of their day. These two images capture members of the Anglo- Persian Oil Company’s fire brigade, based at Abadan refinery, at work. The top image was taken in 1935 outside the station, while the photograph to the right-hand side shows a fire drill being carried out in 1926.

62 Issue 1 2011 BP MAGAZINE The next edition of BP Magazine will be out in June 2011.

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